President Obama – Mint the Trillion Dollar Coin!

"If At First the Idea Is Not Absurd, Then There Is No Hope for It" - Albert Einstein

Just weeks after bringing America to the brink of fiscal-cliff disaster, Republicans are threatening to do it all over again by refusing to raise the nation's debt limit in February. Their actions threaten to plunge the world into a global recession, and they are already harming America's economy right now by depressing consumer confidence, causing business uncertainty, and slowing the still fragile recovery from the Great Recession.

There is a solution: President Obama can authorize the minting of a million-dollar platinum coin. And it's a solution that has the backing of Nobel Prize winning economist Paul Krugman:

"There's a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector's items — but that's not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all." (source)

Yes, it sounds silly, but as Krugman also points out, President Obama will be faced with, "a choice between two alternatives: one that's silly but benign, the other that's equally silly but both vile and disastrous." The idea also has the support of the Philip Diel, the man who ran the U.S. Mint and helped write the law that would authorize the coin's minting. As Diel points out, while the coin might provoke laughter, it would have essentially zero negative impact:

"There are no negative macroeconomic effects. This works just like additional tax revenue or borrowing under a higher debt limit. In fact, when the debt limit is raised, Treasury would sell more bonds, the $1 trillion dollars would be taken off the books, and the coin would be melted." (source)